If we know that the demand curve for good x fails to reflect the total value to society of that good, then we know that
a. the market for good x is characterized by an externality, but we cannot determine whether the externality is positive or negative from this fact alone.
b. the market for good x is characterized by a negative externality.
c. the supply curve for good x fails to reflect the cost to society of producing that good.
d. the market for good x is characterized by a positive externality.

Respuesta :

Answer:

(D) The market for good x is characterized by a positive externality.

Explanation:

The presence of a positive externality implies that a negligible social advantage is more noteworthy than a peripheral private strength. For instance, in thinking about the market for instruction, free markets would supply amount Q at value P. On the off chance that the outer advantage is incorporated, the socially productive yield ascends to amount.

Positive externalities lead to under-utilization and market disappointment. Government arrangements to expand interest for merchandise with positive externalities incorporate it effectively .

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